NEW DELHI: The Centre has released Rs 1,09,019 crore to the states as its regular tax devolution instalment, advancing a payment that would normally have gone out on November 10 so that states can step up spending in the festive season.
"In view of upcoming festive season and to enable states to accelerate capital spending and finance their development/welfare related expenditure, Union Government releases regular tax devolution of Rs 1,09,019 crore to state governments in advance," the finance ministry said in a statement on Thursday.
Under the current arrangement, 41 per cent of the taxes the Centre collects is devolved to the states in 14 instalments over a financial year. The November instalment is the second of the second half of 2026-27.
The early release gives states room in a quarter when capital works usually slow down around the festival season, and comes as several states press the Centre for disaster money. Karnataka, which has declared 226 of its 240 taluks drought-hit, has sought Rs 22,400.58 crore in drought assistance and released Rs 2,500 each to farmers from its own funds while it waits.
The devolution is separate from the disaster transfers states are seeking under the State Disaster Response Fund and the National Disaster Response Fund. The Union Home Ministry revised SDRF and NDRF assistance norms on October 26, which raised Karnataka's entitlement and those of other states.
(With inputs from PTI and media reports)